Michelin Tire False Advertising Settlement Left Out Consumers

In May 2009, Michelin North America entered into a settlement with 17 state attorneys general to settle accusations that it made false claims regarding improved fuel efficiency in its advertising for tires. The multistate Michelin tire false advertising settlement involved the states of Alaska, Arizona, Delaware, Iowa, Kentucky, Massachusetts, Montana, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas and Vermont.

There were, however, no provisions made by the settlement for consumers who relied on Michelin’s fuel efficiency claims in choosing to purchase the company’s tires. To obtain any sort of compensation, consumers who believed these misleading fuel efficiency claims would have to pursue their own Michelin tire class action lawsuit.

The attorneys general had alleged that starting in 2008 Michelin advertisements began promoting savings associated with its fuel-efficient line of tires. These included full-page ads that ran in the Wall Street Journal and USA Today newspapers, as well as radio and television advertisements on ESPN during athletic events. The ads contained representations such as, â€œItâ€™s time to fight back. Michelin fuel-efficient, long-lasting tires help you save money,â€ and, â€œMichelin makes the most fuel-efficient line of tires on the road, which saves you money over the life of your tires.â€ At the time, gas prices were close to $4 per gallon.

An investigation initiated by the Tennessee attorney general concluded that such claims were misleading because Michelin did not adequately disclose that the advertised cost savings were based solely on savings in fuel costs. There are factors other than fuel efficiency that might affect the savings a consumer could achieve by choosing one tire over another, such as the tires themselves, maintenance, replacement, etc. and how those costs might outweigh the fuel savings.

The investigation also concluded that Michelin’s own studies indicated that its tires are only the most fuel-efficient in 78 percent of its classes of tires. However, in some classes of tires, a Michelin tire was not the most fuel-efficient. The attorneys general also expressed concern that footnote disclosures used by Michelin in the fuel-efficiency advertisements were not clear and conspicuous.

In the settlement, Michelin agreed to â€œpossess competent and reliable scientific evidence substantiating any fuel-efficiency claim regarding its tires and to make other business practice improvements regarding its advertising.â€ Additionally, Michelin agreed to pay the states a total of $375,000.00, most of which went to cover attorneys fees.